tv Fast Money Halftime Report CNBC October 22, 2012 12:00pm-1:00pm EDT
markets down 17 points off the lows. what should the new slogan be for windows 8? john writes so confusing it almost likes like innovation. let's get to the "fast money halftime." welcome to the "halftime report." four hours to go until the close. the dow, pretty much flat, lower by 18 points, 13,325, the s&p lower by two points, and the nasdaq is higher by 4 2/3 points, here's what we're following on the halftime. melissa myer makes her public debut on tonight's earnings call. what do shareholders need to hear to finally get excited about the stock? and debating the debate. how crucial is the presidency to your portfolio? what stocks could be big movers in tonight's foreign policy focus? we're trading all the bigger
movers today with stephanie link, simon baker, you don't know why i'm so excited, you'll find out soon. steven weiss and steve grasso. 90% of companies are lowering the bar for next quarter. the guidance stinks. so at what point does the weak outlook hit stock performance overall? simon, you're not married to tammy fay baker, what do you think? >> well, it's tough to recover to that one. earnings have been so disappointing as we've talked about through the show. i think for us, the most concerning thing is the reports. particularly in ibm -- >> the linearity? >> did you like that? >> yeah. >> it's like good english grammar school education. what can i tell you? particularly in technology. what i'm saying is the concern is, yes, the expectations are disappointing, but in terms of september sales being a lot softer than july, it's where the momentum is going. that's something to be a little bit concerned about. zbl zbl
>> stephanie, how do you feel about the linearity. >> well, i won't go there, but only 25% of the company so far have reported. let's put this into a little bit of context here. and expectations certainly have come down pretty low. i would just say that there are pockets of strength, financials, and margins. even ibm, even schlumberger, even ge had actually okay margins. so i think that might be good enough to see about $100 in earnings power. we'll see, it's only 25% in right now, we've got to wait and see. >> you're not so sanguine. >> i'm not so sanguine. is that a good english word? >> i was trying to match linearity. >> good attempt, not quite there. margins aren't going to get you there because that's a zero sum game at some point. that runs out. i think what's most encouraging, i was short c.a.t. coming in to today. i covered most short as i said last week, still short, staying short, but i think the stock can go up. so the good news is that they're more forgiving.
cummings, another one that missed for a second time in a couple of quarters or one quarter. take google, it's still trending down. so the market's becoming somewhat efficient in that regard focusing on the longer term issues. what's their wireless strategy? what are margins going to be? on the industrials, we're getting near the bottom. i don't believe that's the case, though. >> we'll express a little bit more about google. when you think about the earnings guidance that's come out and its negative so far. >> when you look at the energy companies, the industrial companies, people have been so short them for so long, they can't help but go up at that point. they got so beaten up, i bought it going into a lot of these debates, but quite frankly, the coal space, we had btu, we were talking about it later, btu surprised the whole market. i'm staying long that space. >> let's talk now about
caterpillar slashing the 2012 guidance for the second time this year. steven weiss sounded the alarm last month. >> there are expectations underlying their earnings guidance are way too high as they were in prior quarters. so, yes, i think it's going down. >> do you -- >> the stock's still going lower. few weeks ago they talked about 2015, what about this quarter? >> all right. so soon after that, the open, the stock quickly rebounded today into positive territory. so give us a little bit more on the position. you covered a lot on the short. >> i may have covered it all, i put an order to buy it and i think it traded higher than where it was. here's the issue, if you look at what he said, they still are faulty in their estimates and in terms of how they base and budget. always look for china to be 8.5% next year, he was on cnbc earlier and he said there'll be no recession anywhere in the world next year. that's just flat out wrong.
what they've done is taken their forecast and say we'll do the same as we did in 2012 plus or minus 5%. in the meantime, it's not economic. you can buy an excavator in china for $4,700 and ship it here. we saw it in the past -- >> you bought caterpillar this morning. >> yes, this is classic low expectations. and we knew all the news today. earnings we knew were not going to be great. revenues, they already kind of forecasted this out on september 24th at their analyst day. they already said guidance was going to come down. that's a classic de-stocking cycle. the stock's off 28% from its high, trading at seven times ebitda versus the 12 times average. and i actually think you will see a gradual improvement in the u.s. construction market, all of these efforts in terms of brazil and china, stimulus around the world will eventually help in the next 12 to 18 months. and i think at the same time you get -- >> so you're implying you're a patient holder at this point.
>> well, i think not, i think you're definitely going to get a pop because i think expectations are so low. i don't think this was any worse than feared. and so i can make a case for short-term and i can make a case for long-term. >> steve? >> but the only problem as steph points out, c.a.t. gives incredible visibility. so with the imf talking about huge risks, alarming risk going forward, it could hurt the whole space, it could hurt it, but obviously this was all baked into the case and c.a.t. specific. >> 90% of companies lowering the bar for earnings guidance, what does that mean for the market melt-up? brian, always good to see you. >> thanks for having us, michelle. >> a lot of people forecasted this might be disappointing. certainly turning out that way particularly when it comes to guidance. what does that mean to you when you're deciding where to invest and what to do right now? >> well, we were a little concerned heading into the earnings season that many investors were a little over their skis, especially given the fact that our market targets for
this year are 1,425 for the s&p, 1,575 next year. we see more upside next year. the problem is i think more of the upside we've seen has been induced by qe-3 and not a lot of bad news out of europe. now we have to deal with the fundamental slowdown that was clearly happening with global growth slowing. that's why you're seeing a lot of these industrial machine companies lowering their targets. anything that you see that companies that are really focused on international growth are going to bring their numbers down. all of that was common sense. the other thing is common sense and reality in terms of perspective is this quarter is the trough in earnings. and most likely it sure looks like we'll hit $100 of earnings. so, i think we're dicing a little bit too much into the near term phenomenon in terms of earnings again. we think the market near term is ahead of itself. our 1,425 target for the s&p, we remain very comfortable with. >> for 2013, predicting new all-time highs.
>> yeah. the u.s. has an asset, michelle, we're focusing too much on near-term earnings. the u.s. as an asset still looks phenomenal in terms of valuation, the believability and stability of earnings, the operating efficiencies of the u.s. -- >> simon baker hughes wants a question in here. >> yeah, brian, one of your top sector picks is in staples. if you believe we're going into a bull market, staples already looking expensive, when do you move out of them into the cyclical names? >> that's a very good point. staples, they're expensive. back in the '90s, you saw a dramatic multiple expansion in staples between 1993 and 1998, that's the next trend we're headed into. multiple expansion. because we as investors over the last 10 or 12 years did not believe in the denominator of earnings. you're going to pay for those earnings and multiples going up from here. >> so multiple go up, do
revenues go up? do margins go up? >> well, margins, you know, margins are peaking still. and our work shows that once you see margins fall off in the market historically, stock market's up following margin peaks and here's why, companies are starting to put money to work in terms of employing people because the economy's going up. so i think we play way too much on the margin side of things. i think revenues will come back because i believe that volumes will come back to u.s. companies because of the consternation that's going on in europe and china, obviously growth will come back to u.s. companies and that's where we're going to see the volume. and that's where we get this whole manufacturing renaissance. and that's specifically why we like tech and industrials. >> okay. but brian, you didn't explain, you're calling for a secular bull market next year. as an analyst, you know, hopefully you're looking forward, why would you be calling the cyclicals and still saying staples? >> well, again, staples companies are growth companies -- >> why not cyclicals specifically?
>> well, we are overweighed technology, industrials, and energy. that's pretty cyclical. that's number one. number two, technology companies as you'll know are not as cyclical as they used to be. the stability of earnings and great valuations of cash flows, especially in large cap tech are a lot less cyclical. the industrials clearly are very cyclical and so are energy. don't be quick to say that staples, in fact, are not growth alternatives because actually you have some of the great growth companies within the staples sector. >> all right. good to see you. thanks for joining us. >> thank you. let's get a market flash in here. bertha coombs is watching peabody energy. >> that's right, michelle. peabody getting a nice bounce on the back of those earnings, better than expected, also raised the bottom end of its outlook above estimates. says as identified about $100 million in annual savings that could involve job cuts, they did not outline how many jobs cuts overall. but the stock getting a nice bounce here. do watch the fact that there is a 9% short interest in the stock, as well.
>> thank you, bertha. all right. let's trade peabody, btu, we talked about it a little earlier on, steve grasso. >> the margins in the powder river basin area is what put them over the top and i think that surprised the marketplace. you want to look at prb, exposed coal names, aci, btu, cld. i've been sort of bullish on them maybe about a week and a half. and i want to give some credit to joe, as well. joe terranova on friday. we both picked btu, nice return on the day. >> i wasn't brave enough to go into peabody, but i came into the week long consul coal. i think that's a very attractive name to play. and much less tied to the coal cycle than some of the other companies. i'd say away from alpha, i'm still worried about the balance sheet. >> thank you, guys. ahead on "the halftime report," why china may be the elephant in the room during
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just a few more hours, we're going to know a lot more about mayer's makeover plan for yahoo. the company reports earnings after the bell. but the real news is expected to come during mayer's first post earnings conference call. julia boorstin has details on the issues that analysts are going to be looking for. julia? >> reporter: well, michelle, we can expect mayer to focus on improving yahoo's products, like
flickr, to help compete with google and facebook. this is instead of focusing on content like some of her predecessors, and her mobile strategy will be particularly scrutinized. yahoo has relatively little exposure to ads and doesn't have the electronics like google and other rivals. after google's earnings were dragged down by the shift to lower margin mobile, we'll have to see if yahoo is under similar pressure. mayer has a lot on her plate. bing powered yahoo search is responsible for about third of the revenue but continues to lose market share, just 12.2% of search back in september. we can also expect mayer to field questions about acquisitions. reported she's shown interest in open table as well as advertising at tech companies. and we haven't yet heard from yahoo or millennial on those topics. mayer has shaken up the management ranks. she hired a new cfo and a new
c.o.o. we'll have to see how the new management team plans to compete with the likes of google and apple and amazon. >> great preview, thank you so much. let's trade this, guys. what do you think here? are you going to do anything before this conference call? >> not anything before, not anything after. i think she's got a very tough road. i think obviously she's qualified, don't know her, but all the feed back is phenomenal job at google. however, you know, it's a highly competitive space and we've heard that buzz word mobile strategy now from every company. nobody's succeeding, so i'm going to take a wait and see. >> simon? >> i'll do a wait and see too. she's hiring a lot of really smart people away from google. henry decastro has a specialty, but let's wait and see. she needs a little bit of time. >> i do think this could be an interesting long-term kind of speck play. because you do have a new management team, not only a new
c.o.o., a new cfo, like a restructuring guy, he's done it in the past. i expect to see and hear more about that. it's his first day of the job is today. we're not going to get anything tonight, i don't think major, but over time. and i think they've got a really good balance sheet and expecting about $3 billion in buybacks between now and 2014. maybe you'll have some stability, clearly the strategy -- her strategy is going to be key for the stock to work, but i do think some of the parts is kind of interesting. >> you know what i'm so glad about, steve grasso? no one has mentioned monetizing the asian assets. are we finally over that? i don't want to talk about that anymore. >> you bring up a great point there. she is slowly but surely gaining the investment community's respect here and going for technology versus media content. it is caught in a trading range, 14 1/2, 16 1/2, i'd play it accordingly, but like the rest of the group, i'm not eager to jump in here. >> everybody sitting on their hands. but what does a true silicon valley insider think that yahoo should do next?
a 30-year tech veteran, honored to have her join us from san francisco. great to have you here, thanks so much for joining us. >> hello. >> do you have confidence in marisa mayer's ability to turn this company around? >> well, i think meg whitman set the stage that turn arounds take a while. but marissa's got strong technical chops. and you mentioned monetizing mobile. this is a big experiment in the tech industry. everybody's a 2.0 company now whether they want to be or not. google, microsoft, even amazon is going to have to deal with mobile sooner versus later. so it's jump ball. and she's going to enter the court strongly with everybody else. >> and would you say she's got a fairly even playing field compared to everybody else? because nobody else seems to really make it happen yet? >> i think she's got a lot of strong cards to play. she's got a lot of cash, so she can do acquisitions. if you've noticed, most of the
growth in mobile has come from acquisitions by companies like facebook, for example. she also has ad platforms, in the pc area, she understands ad networks and she'll have to figure that out on mobile. and she understands content, they've monetized it before, they'll have to monetize it differently before. she's got all the ingredients so that the deck is stacked in her favor. but it's going to require a lot of skill and a lot of competition for talent in a tight talent market in the bay area. >> yeah. steve grasso's got a question. >> here's the basic thing. how do you fall back in love with a stock that's fallen out of favor? you touched on it with meg whitman, saying turnaround stories take a decent amount of time. yahoo has a knack for spending way too much money. will we see these niche takeouts?
>> i don't think there are a lot of big takeouts left. i think all the innovation is happening in the smaller companies. so they would be called tuck-in acquisitions. but that's where the deep innovators are, where some of the innovation is happening in monetization at mobile. i also think that it's going to be a long dating period with this company. and it's going to take a while to turn it around. but she's got some time. she's got the cash. she's got the technical skills, she's got to find the talent and the small companies to buy. >> steve? >> and so you mentioned she has cash, but cash is not a commodity that's unique to her in this space. her competitors all have lots of cash. so are you counting on her to be able to deploy that cash better than the others? or because of the size of yahoo at this point versus the size of a google or facebook that will be easier impact the future of yahoo versus the others? >> well, one competitive advantage we haven't mentioned is the google infrastructure she's part of. and every time there's a strong
company in the valley, it leads to innovation. so the number of new innovators that have google people in them is huge. and that's her tribe. she knows that tribe really well. she's been in touch with that tribe, that's a competitive advantage for her on acquisitions. >> and we want to talk about the three big technology shifts that you see overall. you already talked about pc to mobile, number one. what are the other two? >> well, the other two are certainly on premise to cloud. that's happened, we've seen that in the ipos this year, workday, guide wire, service now. and the third is small data to big data, or analytics. you can see that in earnings announcements. even ibm's announcement. they spent a ton of money acquiring analytic companies over the last couple of years, and analytics revenue in their software space was a huge growth area for them. >> and we were just showing people the performance a lot of these ipos, they've been astronomical compared to a lot
of the other ipos that we've seen so far. workday and service now both up more than 90%. so that speaks to the trend, can you get more out of this? >> yeah. we had a lot of companies in silicon valley today. we have some fast-growers that are private companies in our portfolio. inside sales is an example. those are companies built on the cloud, launch on the cloud, have subscription revenue more predictable revenue and very high growth. and the market likes growth. and we're going to bring a lot more companies to the public market that represent the cloud and analytics as well as having mobile baked in from the start. so there are a lot of new private companies that we'll see in the next couple of years. some, perhaps, in 2013 that will have the same performance metrics that you've seen in workday, servicenow, guidewire,
and splunk. >> anybody who can give us a good sense of where technology is going. give us a headline of what the future trends are going to be. ann winblad, thanks for joining us. >> thanks. >> any movers in there that you want to jump into because of what she said? >> we kind of own some boring names, emc, in terms of cloud. >> analytics in cloud. >> and i think ibm is interesting because it came down so much. went from loved to now hated because of the horrible quarter which i didn't think was that bad. stocks down a lot and they're making acquisitions in cloud and making acquisitions in analytics and clear in their quarter. i think both of those names are very cheap stocks at this point and i think names to own. >> what about yahoo? can it hang with facebook and google? >> i don't think yahoo's there, i think she's being diplomatic in terms of the time frame it's going to take. still a crowded space, she does have cash, but everybody's got cash, everybody's smart, looking to acquire talent. just stay on the sideline. for me, goog will start to get
interesting, the huge run-up, had the big falloff as we saw last week, it's not there yet because you have to let the momentum players still reverse out of it. but at some point, a compelling value. they're still the market leader. >> stevie g., did she say anything that moved you? >> i am long google, i bought it on that dip and confident i will make some money on that. they actually went for advertising space to a royalty basis versus a revenue stream. so that is going to be a short-term hurt, but i think a long-term gain. amazon is my favorite cloud play, my favorite everything play, but staying in it for a while. >> thank you, guys. coming up, show time, former goldman sachs employee greg smith sounds a lot like simon baker. made his debut on the "today" show today. did he really spill the beans on what was going behind closed doors at goldman sachs? we're going to tackle his call on the muppets and more.
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breaking news on jamie dimon. let's get to eamon javers. eamon? >> hi, michelle. well behind the scenes business push here for a solution to the fiscal cliff is continuing in a big way today. jamie dimon, my sources are saying is hosting a lunch today at jpmorgan for 75 ceos from the new york business community. the idea is to get these ceos behind the fix, the debt effort. it's not being called a fundraiser this lunch that jamie dimon is hosting today, but he is going to encourage the ceos to go out and support this fix the debt effort. the effort is going to be raising money to spend on tv ads after the november election, encouraging washington to come together with some kind of a deal on the fiscal cliff. dimon himself supports a simpson/bowles like solution which would include tax increases and spending cuts, but it's going to be mobilizing a lot of business community support. and this luncheon today for 75
ceos at jpmorgan headquarters hosted by jamie dimon is all part of the behind-the-scenes push by the business community to get something done in washington. two senators of note will be there, mark warner and lamar alexander attending this lunch at jpmorgan today. >> i'm relieved to hear there'll be more ad spending after the election. eamon, thank you. >> just when you thought the tv ads were over, they'll start again after the election's over. >> cable, they should spend it on cable. thank you. today's top three trades focus on earnings. hasbro's profits falling 4%, citing weak sales in europe and asia. the stock is a little flat. >> i thought the quarter was okay. revenue's a little light because of fx. they've got a big restructuring going on, cost-cutting coming out. headed into the fourth quarter, i think you want to be long especially since it's lagged the biggest competitor. >> freeport mac, up 1.5%. >> the company actually blamed lower volumes in indonesia. and if you look at it on the
chart back to march, it's had a tough time with the $40 level. it took until roughly september to get back above it. i would keep this on a short leash, this is your proxy to china. if you buy it here, please use 39 as an exit strategy if it doesn't work. >> finally shares of vf corp. falling after the maker of north face and wrangler jeans lower by about 4% to $1.60 or $160. they fell short on revenue. simon james baker? >> yeah, they disappointed and fell short on revenue, stock up 27% on the year. i mean, listen, i'd be buying this on weakness. it's still well-positioned to capture a healthy portion of consumer wallet share and one of the best operators in the business. i'd be buying it on weakness here. >> former goldman sachs employee who wrote a scathing "new york times" editorial about the firm is making headlines again. his new book "why i left goldman sachs" released today. take a listen to what he had to say this morning on the "today" show about goldman's treatments of its clients.
>> the idea of calling someone a muppet or a name is not the bad thing. the bad thing is the reason you're calling them a muppet. because a teacher's pension fund gets tricked into trading a product it doesn't understand. >> greg smith's allegations hurt the company's reputation. simon, let's start with you because you also speak english with a funny accent. >> i speak real english. the linearity was the word. nothing new came out about the stock. everybody loves to hate goldman sachs at this stage. i think there was no revelations. i think the big thing was the publishing company paying him $1.5 million to write this story. and it was the same publisher as yours, steve, which doesn't say a lot about that. >> do they really use muppets negatively. >> i mean, i don't know where i go with that. >> you have a problem with
kermit the frog. >> the biggest issue with goldman, you have to ask, how could they employ this guy for 12 years? that's the question i have. clearly he's a now content. he was making $500,000, a lot of money in the world, not a lot of money at goldman. i would pay no surprise to this. surprise, surprise, a company wants to make money from their accounts. it could be goldman, it could be proctor and gambling, anybody, that's business. i advise the guy to go and apply to some charity and work there. be complete ll lly -- put your where your mouth is. >> two years ago, it would have meant something. perception is reality. goldman was really hated. at this point, i think it was an afterthought. and goldman left, it's on the sidelines. i don't think people use that as a reason to hate the rich.
>> what do you assume? you have got to fend for yourself. i thought they were among the most ethical firms on the street. they don't want to blow you up. then you're not coming back you're out of business that's not hour they business grows and it's a small community and word spreads. you have to look at some of the places that bought these exotics that didn't know what they were doing. that's where the blame is and that's where the pension the people that have their money in the pension should be pushing back. >> we're going to hear more from greg smith tomorrow because he's going to be on cnbc's "closing bell" at 4:30 p.m. eastern time.
>> pretty easy to do, open table zoomed on a report that marissa mayer might be interested in taking them over similarly to what she did at google. now a report on business insider saying a yahoo insider with flaherty calls that idea laughable open table well off the highs for today. >> laughable, huh? all right. we see the stock moving on that. thank you, bertha. still to come, the street seeing the worst guidance in more than a decade. how do you trade this week's coming earnings? and why china is shaping up to be the elephant in the room during tonight's final presidential debate on foreign policy. plus, we take stock of both president obama and governor romney's cnbc indices. we'll be right back.
make you feel old. tonight, the final presidential debate. i focuses on foreign policy, biggest interest for cnbc viewers, of course, going to be china. romney, in fact, one of his five-point plans is related to china. so let's talk first about -- they're going to talk about china, but cnbc, we're smarter than that, we know there are a lot of subissues related to china. first, the currency. this is the chinese yuan, we have given you a 20-year chart to make the point that it was fixed for some time. romney claiming to label them a currency manipulator. saying it would be stronger. with want to point out, they have made some progress. wither going to show you a three-year chart, which has been showing that the yuan has been getting stronger and stronger. there are a lot of folks who say the chinese have been particularly aggressive about letting yuan getting stronger and stronger. you see the dollar getting
weaker because they're trying to set the stage for better relationships with whoever is the next president. let's move on to the second issue, which is trade. what we're showing you here is these red-barred charts over the last five years here. we have seen u.s. investment in china rising dramatically. now, the yellow -- the white bars are chinese investments in the united states, also rising dramatically. but the overall level is much smaller, you can expect that to be issues in the coming years as chinese -- as the chinese want to invest more and more in the united states thanks to rhodium group for putting that together for us. next topic, cyber security, an issue as we keep hearing reports about whether the chinese are hacking the systems here in the united states. and we want to point out, the chinese transition. they do this every ten years, happening on november 8th, nearly coincides with the u.s. election, that hasn't happened in many, many decades. so it's going to be a really pivotal election time or let's not call it an election in china, a change in leadership
time, potentially for the united states, but for two big economies, the two biggest economies in the world. all right. president obama and governor romney are hours away from their final debate before the election. we compiled obama and romney indices featuring companies that could be viewed as winners or losers depending on who wins. so are you buying obama or romney stocks? steve weiss, you heard what i had to say about china, what are you thinking about all this and how it's playing into your investing? >> well, i appreciate all your good efforts over by the screen there, michelle, but frankly i don't care. i think it's a lot of political bluster, and what comes out of it will be more reason. of course their currency is the strongest in the world, but it's not there yet. for me, what i'm more concerned about tonight is if there's a knockout punch in terms of the debates, which i'd like to see from -- not going to name the candidate but starts with an "r," and that to me that's going to be very, very positive for the market. >> robama.
>> exactly. that'll be positive for the market going forward. you need to be pro-business. now, people come out and say the elections don't matter and they won't matter for the next year. but ultimately, you've got to look at the industries that your candidate who you believe will win will do better. and that's where you come to the cnbc stock index that's based on obama or romney. what's interesting about both of them, you have some health care names there. so wellpoint, continues to do well, that could be an obama name or a romney name. >> steve grasso, the obama index going into tonight's debate is down, the romney index is up. do you read anything into that? >> yeah. i think if you look at the viewership with these last two debates that you've had, it's an unbelievable amount of people that are waiting for this last moment to make the decision. i'm currently long all those names in coal. aci, btu, and i'm also along aetna. so if you look at this, people are really waiting till the last possible moment to bet on this election which their vote basically and with their pocketbook.
you want to be betting on the guy that you think is going to move the economy forward. now the s&p is the greatest leading indicator of them all. i think it really does matter and it's going to matter immediately. >> stephanie link, what do you think? are you doing anything based on the outcome of the election or doing anything ahead or after the debate? >> no, a, it's too close a call anyway to make a decision on who is going to win right now. >> because they're neck and neck. >> yeah. we look at fundamentals and the financials. there aren't that many names on this list, although morgan stanley and citigroup are on the romney list. there are other financials i would own based on fundamentals, based on what we learned because they reported okay earnings. actually as bad as tech has been, financials were better. and especially given the flat yield curve, a lot of companies able to hold the nims down a little bit. i'm looking at jpmorgan, if it's weak, i'm looking at wells fargo because it's a housing play. key bank, really a great quarter last week and it's pulling back today giving you opportunities.
on fundamentals, that's where we're leaning toward. >> simon baker, you want to comment here even though you don't have an american accent? >> i can't even vote, actually. i was looking for the ralph nader index. i think you've got to look at the areas in the market doing well, housing, financial, stay with them. and i think basically from what we've been talking with your guests, just corporate executives are looking for stability before they start -- >> stability -- >> linearity. trying to pick the stocks beforehand. >> cnbc's live coverage of the third and final presidential debate begins tonight 7:00 p.m. eastern time takes place at lynn university in boca raton, florida. coming up, caterpillar warning europe is a bigger concern than china. what does this mean for the dollar and a whole lot more? plus, we're going to take to twitter to play the apple name game. what do you think the new mini ipad should be called? [ male announcer ] do you have the legal protection you need?
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good afternoon, everybody. coming up in the next hour of "power lunch," it's a big week for technology. you thought last week was? well, this week microsoft rolls out windows 8, apple unveils a mini ipad. so what's at stake for these two big titans? smart ways to play catch up with your retirement savings. everybody's a little bit behind. we've got $3.5 trillion worth of advice for you from blackrock. and aig's ceo is banging his fists saying he demands a thank you from the government for repaying billions in the taxpayer bailout money. has he lost the plot here? we'll cover that and more, michelle, when "power lunch" kicks off at the top of the hour. >> sounds great, tyler. looking forward to it. caterpillar commenting today that it expects slightly better world growth in 2013 including in china, but continuing difficulty in europe. how heavily are european concerns weighing on the market? more on the problems overseas.
what did you think of the comments from the caterpillar reference to europe? does that impact the euro today? >> we're not seeing too much of a reaction. but i think what's important is that caterpillar is saying out loud what many other companies are thinking which, is you know, they're turning a little optimistic on the u.s. china's not a huge concern. they'll probably bottom, but europe remains a hot bed of uncertainty. and this is a big issue because european issues have been unwilling and ineffectively in ending europe's sovereign debt crisis. and as a result, caterpillar thinks the recessionary conditions in europe is going to last well into 2013. i think they're probably right, which is why they made the comments that they made today. >> when it comes to europe, i see through one basic idea at the moment. germany said it's all in, greece is staying in and they're going to put up the money somehow, some way, despite all the noise that we hear back and forth. and until we get some news that somehow germany's no longer in, everything moves forward. is that your sense, as well? >> it is with one interesting
caveat. which is that spain needs to say we need a bailout first. everyone's in, you don't have -- >> why? the interest >> why? their interest rates are low? who cares? >> that is the problem, which is that the market wants and won't accept anything short after spanish bailout. that's why everything is still very tense in the markets. but once we get that, nthen, ye, all the other players are lined up to say, yes, we'll give them money. but until then, we're still in this freeze mode. i like selling euros but not necessarily against the u.s. dollar. all this optimism from caterpillar about other parts of the world should mean risk gone. i like selling euros against the british pound. what i'm looking to do is i like selling euro pounds on a break below 81 cents with a stop at 81.75 and a target of 79.75. we've got uk gdp numbers this week. i think they'll be better than expected which could help us get in to this trade. >> i'm sure simon baker hughes
is not happy with that one. but we'll let it go. get currency trades like this every friday starting 5:30 p.m. eastern time on cnbc's "money in motion." still to come -- the biggest "pops & drops" in today's trading. and what do you think apple will call its ipad mini? can't they just call it the ipad mini? some answers from the twitverse when "halftime" continues. americans are always ready to work hard for a better future. since ameriprise financial was founded back in 1894,
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what is today's hot topic on twitter? cnbc's seema mody is following your tweets joining us live from the nasdaq. >> the excitement building on twitter over tomorrow's big and the event where it is expected to take the wraps off a new smaller version of its ipad. a lot of people on twitter are playing the name game, saying predicting the ipad mini will be called ipad air. nigel thinks apple will call the mini the ipad and rename its latest full-size ipad with the retina display the ipad pro. then there's some that think apple's unveiling a lot more than just a new tablet. "hold on to your hats, tech heads." not everyone is a believer. we have some bears out there. "apple supposedly releasing an ipad mini soon. won't that basically be like rereleasing the ipad touch 2?"
the blogosphere making a big call today. a very well known tech blog tweets apple may discontinue the ipad 2 to make room for the ipad mini. basically writing that the ipod touch priced at $299 and the ipad 2 at $399, there's very little room for an in-between product. traders, what do you think of that? >> you trading this ahead of this big announcement? >> i think the issue here is apple's really gone downstream. the fact they feel they have to compete in the lower end -- >> you think the ipad mini is lower end? >> yes, it is. i priced -- >> but the ipod got smaller and smaller and cheaper and cheaper. >> that's different. that's a unique product. >> auo is the way to play it off the glass. they make the glass along with lg along with the ipad mini. you've seen in the charts they've had negative head lins on the stock but the stock's been moving higher as of late. that's the way i play it. >> that's like the modern day
version of buy the ketchup. don't worry about burger king or mcdonald's. just buy the ketchup. >> the new name should be ipad pocket. give me a little royalties here. >> the other one grasso, corning glass is another way to play that, too. i like the name fun size. >> fun size? >> that's a little weird. we're not going to bring that up. >> we're coming in to halloween. i know you're a fun size guy, grasso. >> thanks, seema. coming up in the next hour, how to play catch-up with your retirement savings. $3.5 trillion worth of advice from blackrock's founder. first though "final trades" next on the halftime report. in america today we're running out of a vital resource we need to compete on the global stage. what we need are people prepared for the careers of our new economy. by 2025 we could have 20 million jobs without enough college graduates to fill them. that's why at devry university,
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